Public Utilities Rates
Wildfire costs would weigh more in California rate cases
California power and gas customers could face tougher scrutiny on rate hikes under SB 1233, which would make regulators weigh wildfire damage and other utility-linked harm and require utilities to disclose more about the cash behind the request.
California regulators would have to take a harder look at wildfire damage and other utility-linked harm before approving some rate changes. SB 1233 also asks companies to disclose more about the cash and capital behind the request.
- Utilities would have to show more of the math behind proposed rate hikes.
- The bill targets changes linked to a utility’s return on invested capital.
- Regulators would have to weigh wildfire-related harm and court judgments.
- It also flags costs a utility or its officers pushed onto customers.
- In California, monthly power and gas bills are already full of the kind of financial logic most customers never see unless they are fighting an increase
In California, monthly power and gas bills are already full of the kind of financial logic most customers never see unless they are fighting an increase. SB 1233, from Sen. Ben Allen, would make electric and gas corporations spell out more of the case when they seek a rate change tied directly or indirectly to their request for return on invested capital, the profit benchmark investors expect.
That matters because the California Public Utilities Commission does not just check arithmetic. Under the bill, utilities would have to show how much internal cash they have to help pay for needed investment and explain how their capital structure affects the overall revenue they want from customers.
The record regulators would have to build
SB 1233 also reaches the part of the rate fight that can linger long after the original event. When the commission approves a change, it would have to take into account, and make specific findings about, disasters such as wildfires tied to a utility’s infrastructure.
The bill would also require the commission to address past or current civil judgments or criminal convictions related to that infrastructure, along with conduct by the utility or its officers that imposed unreasonable or imprudent costs on customers. The effect is to make the public record carry more of the burden before households pay more.